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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) May 9, 2017

WESTAR ENERGY, INC.

(Exact name of registrant as specified in its charter)

KANSAS
 
1-3523
 
48-0290150
(State or other jurisdiction of incorporation or organization)
 
(Commission File Number)
 
(IRS Employer Identification No.)
 
 
 
 
 
818 South Kansas Avenue, Topeka, Kansas
 
66612
(Address of principal executive offices)
 
(Zip Code)
Registrant's telephone number, including area code
 (785) 575-6300

Not Applicable
(Former name or former address, if changed since last report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o




WESTAR ENERGY, INC.

Item 2.02. Results of Operations and Financial Condition.

On May 9, 2017, we issued a press release announcing our earnings for the period ended March 31, 2017. A copy of our May 9, 2017 press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. We are also including our 2017 First Quarter Earnings package, which is attached hereto as Exhibit 99.2 and is incorporated herein by reference. The information furnished pursuant to this Item 2.02, including Exhibits 99.1 and 99.2, will not be incorporated by reference into any registration statement filed by us under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated by reference.

Item 9.01. Financial Statements and Exhibits.

Exhibit 99.1    Press Release dated May 9, 2017
Exhibit 99.2    2017 First Quarter Earnings package








SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 

 
 
 
 
WESTAR ENERGY, INC.
 
 
 
 
 
 
 
Date:
 
May 9, 2017
 
By:
 
/s/ Larry D. Irick
 
 
 
 
Name:
 
Larry D. Irick
 
 
 
 
Title:
 
Vice President, General Counsel and Corporate Secretary








EXHIBIT INDEX

Exhibit Number
 
Description of Exhibit
Exhibit 99.1
 
Press Release dated May 9, 2017
Exhibit 99.2
 
2017 First Quarter Earnings package




Exhibit
Exhibit 99.1

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Westar Energy Announces 1st Quarter 2017 Results.
TOPEKA, Kan., May 9, 2017 - Westar Energy, Inc. (NYSE:WR) today announced earnings of $60 million, or $0.42 per share, for the first quarter 2017 compared with earnings of $66 million, or $0.46 per share, for the first quarter 2016.

Lower net income for the quarter, compared with last year, was driven by the effect of mild weather resulting in lower residential and commercial sales. Also contributing to the lower net income was a decrease in corporate-owned life insurance income, higher depreciation expense due in part to the start of operations of our Western Plains Wind Farm, and higher distribution expense from taking advantage of the warmer winter weather to execute our vegetation management strategy earlier in the year.

Additional Information
Because of the pending transaction with Great Plains Energy, Westar Energy will no longer host a quarterly webcast and conference call. Investors may continue to contact our Investor Relations Department at (785) 575-8227.

This earnings announcement, a package of detailed first-quarter financial information, the company's quarterly report on Form 10-Q for the period ended Mar. 31, 2017, and other filings the company has made with the Securities and Exchange Commission are available on the company's website at www.WestarEnergy.com.
- 30 -


As Kansas’ largest electric utility, Westar Energy, Inc. (NYSE:WR) provides customers the safe, reliable electricity needed to power their businesses and homes. We have 7,800 MW of electric generation capacity that includes renewables and traditional power sources with half the electricity supplied to our more than 700,000 customers from emissions free sources: nuclear, wind and solar, with a third coming from renewables. We are a leader in electric transmission in Kansas coordinating a network of lines and substations that supports one of the largest consolidations of wind energy in the nation. Our employees live, volunteer and work in the communities we serve..

For more information about Westar Energy, visit us on the Internet at http://www.WestarEnergy.com.

Forward-looking statements: Certain matters discussed in this news release are “forward-looking statements.” The Private Securities Litigation Reform Act of 1995 has established that these statements qualify for safe harbors from liability. Forward-looking statements may include words like “believe,” “anticipate,” “target,” “expect,” “pro forma,” “estimate,” “intend,” “guidance” or words of similar meaning. Forward-looking statements describe future plans, objectives, expectations or goals. Although Westar Energy believes that its expectations are based on reasonable assumptions, all forward-looking statements involve risk and uncertainty. The factors that could cause actual results to differ materially from these forward-looking statements include those discussed herein as well as (1) those discussed in the company's Annual Report on Form 10-K for the year ended Dec. 31, 2016 (a) under the heading, “Forward-Looking Statements,” (b) in ITEM 1. Business, (c) in ITEM 1A. Risk Factors, (d) in ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, and (e) in ITEM 8. Financial Statements and Supplementary Data: Notes 3, 14 and 16; (2) those discussed in the company's Quarterly Report on Form 10-Q filed May 9, 2017, (a) under the heading, "Forward-Looking Statements," (b) in ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations and (c) in Part I, Financial Information, ITEM 1. Financial Statements: Notes 3, 11 and 12 and (d) in ITEM 1A. Risk Factors; and (3) other factors discussed in the company's filings with

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WESTAR ENERGY NEWS RELEASE    Page 1 of 3
Westar Energy announces 1st quarter results

the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date such statement was made, and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement was made.


Media Contact:
Gina Penzig
Media Relations Manager
Phone: 785-575-8089
Gina.Penzig@westarenergy.com
Media line: 888-613-0003

Investor Contact:
Cody VandeVelde
Director, Investor Relations
Phone: 785-575-8227
Cody.VandeVelde@westarenergy.com


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WESTAR ENERGY NEWS RELEASE    Page 2 of 3
Westar Energy announces 1st quarter results

Westar Energy, Inc.
Condensed Consolidated Statements of Income
(Unaudited)

 
Three Months Ended Mar. 31,
 
2017
 
2016
 
Change
 
% Change
 
(Dollars In Thousands, Except Per Share Amounts)
REVENUES:
 
 
 
 
 
 
 
Residential
$
176,169

 
$
179,290

 
$
(3,121
)
 
(1.7
)
Commercial
155,707

 
165,673

 
(9,966
)
 
(6.0
)
Industrial
98,516

 
100,697

 
(2,181
)
 
(2.2
)
Other retail
(12,349
)
 
(14,381
)
 
2,032

 
14.1

Total Retail Revenues
418,043

 
431,279

 
(13,236
)
 
(3.1
)
Wholesale
77,367

 
67,412

 
9,955

 
14.8

Transmission
69,441

 
63,915

 
5,526

 
8.6

Other
7,723

 
6,844

 
879

 
12.8

Total Revenues
572,574

 
569,450

 
3,124

 
0.5

OPERATING EXPENSES:
 
 
 
 
 
 
 
Fuel and purchased power
113,855

 
100,058

 
13,797

 
13.8

SPP network transmission costs
60,674

 
60,760

 
(86
)
 
(0.1
)
Operating and maintenance
81,198

 
77,757

 
3,441

 
4.4

Depreciation and amortization
88,625

 
83,640

 
4,985

 
6.0

Selling, general and administrative
59,157

 
56,456

 
2,701

 
4.8

Taxes other than income tax
42,716

 
48,968

 
(6,252
)
 
(12.8
)
Total Operating Expenses
446,225

 
427,639

 
18,586

 
4.3

INCOME FROM OPERATIONS
126,349

 
141,811

 
(15,462
)
 
(10.9
)
OTHER INCOME (EXPENSE):
 
 
 
 
 
 
 
Investment earnings
3,155

 
2,016

 
1,139

 
56.5

Other income
1,300

 
9,477

 
(8,177
)
 
(86.3
)
Other expense
(5,316
)
 
(5,543
)
 
227

 
4.1

Total Other (Expense) Income
(861
)
 
5,950

 
(6,811
)
 
(114.5
)
Interest expense
41,095

 
40,431

 
664

 
1.6

INCOME BEFORE INCOME TAXES
84,393

 
107,330

 
(22,937
)
 
(21.4
)
Income tax expense
20,911

 
38,622

 
(17,711
)
 
(45.9
)
NET INCOME
63,482

 
68,708

 
(5,226
)
 
(7.6
)
Less: Net income attributable to noncontrolling interests
3,821

 
3,123

 
698

 
22.4

NET INCOME ATTRIBUTABLE TO COMMON STOCK
$
59,661

 
$
65,585

 
$
(5,924
)
 
(9.0
)
BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING ATTRIBUTABLE TO WESTAR ENERGY, INC. (See 10-Q Note 2):
 
 
 
 
 
 
 
Basic earnings per common share
$
0.42

 
$
0.46

 
$
(0.04
)
 
(8.7
)
Diluted earnings per common share
$
0.42

 
$
0.46

 
$
(0.04
)
 
(8.7
)
AVERAGE EQUIVALENT COMMON SHARES OUTSTANDING (in thousands):
 
 
 
 
 
 
 
Basic
142,437

 
141,993

 
444

 
0.3

Diluted
142,696

 
142,311

 
385

 
0.3

DIVIDENDS DECLARED PER COMMON SHARE
$
0.40

 
$
0.38

 
$
0.02

 
5.3

Effective income tax rate
25
%
 
36
%
 
 
 
 

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WESTAR ENERGY NEWS RELEASE    Page 3 of 3
Exhibit


Exhibit 99.2
Westar Energy, Inc.
First Quarter 2017 Earnings
Released May 9, 2017





Contents
Page
 
 
 
 
 
 











Cody VandeVelde
Director Investor Relations
785-575-8227
cody.vandevelde@WestarEnergy.com



NOTE:
The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q for the period ended March 31, 2017 should be read in conjunction with this financial information. The enclosed statements have been prepared for the purpose of providing information concerning the Company and not in connection with any sale, offer for sale, or solicitation to buy any securities.





Westar Energy, Inc.
Condensed Consolidated Statements of Income
(Unaudited)

 
Three Months Ended March 31,
 
2017
 
2016
 
Change
 
% Change
 
(Dollars in Thousands, Except Per Share Amounts)
REVENUES:
 
 
 
 
 
 
 
Residential
$
176,169

 
$
179,290

 
$
(3,121
)
 
(1.7
)
Commercial
155,707

 
165,673

 
(9,966
)
 
(6.0
)
Industrial
98,516

 
100,697

 
(2,181
)
 
(2.2
)
Other retail
(12,349
)
 
(14,381
)
 
2,032

 
14.1

Total Retail Revenues
418,043

 
431,279

 
(13,236
)
 
(3.1
)
Wholesale
77,367

 
67,412

 
9,955

 
14.8

Transmission
69,441

 
63,915

 
5,526

 
8.6

Other
7,723

 
6,844

 
879

 
12.8

Total Revenues
572,574

 
569,450

 
3,124

 
0.5

OPERATING EXPENSES:
 
 
 
 
 
 
 
Fuel and purchased power
113,855

 
100,058

 
13,797

 
13.8

SPP network transmission costs
60,674

 
60,760

 
(86
)
 
(0.1
)
Operating and maintenance
81,198

 
77,757

 
3,441

 
4.4

Depreciation and amortization
88,625

 
83,640

 
4,985

 
6.0

Selling, general and administrative
59,157

 
56,456

 
2,701

 
4.8

Taxes other than income tax
42,716

 
48,968

 
(6,252
)
 
(12.8
)
Total Operating Expenses
446,225

 
427,639

 
18,586

 
4.3

INCOME FROM OPERATIONS
126,349

 
141,811

 
(15,462
)
 
(10.9
)
OTHER INCOME (EXPENSE):
 
 
 
 
 
 
 
Investment earnings
3,155

 
2,016

 
1,139

 
56.5

Other income
1,300

 
9,477

 
(8,177
)
 
(86.3
)
Other expense
(5,316
)
 
(5,543
)
 
227

 
4.1

Total Other (Expense) Income
(861
)
 
5,950

 
(6,811
)
 
(114.5
)
Interest expense
41,095

 
40,431

 
664

 
1.6

INCOME BEFORE INCOME TAXES
84,393

 
107,330

 
(22,937
)
 
(21.4
)
Income tax expense
20,911

 
38,622

 
(17,711
)
 
(45.9
)
NET INCOME
63,482

 
68,708

 
(5,226
)
 
(7.6
)
Less: Net income attributable to noncontrolling interests
3,821

 
3,123

 
698

 
22.4

NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC.
$
59,661

 
$
65,585

 
$
(5,924
)
 
(9.0
)
BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING ATTRIBUTABLE TO WESTAR ENERGY, INC. (See 10-Q Note 2):
 
 
 
 
 
 
 
Basic earnings per common share
$
0.42

 
$
0.46

 
$
(0.04
)
 
(8.7
)
Diluted earnings per common share
$
0.42

 
$
0.46

 
$
(0.04
)
 
(8.7
)
AVERAGE EQUIVALENT COMMON SHARES OUTSTANDING (in thousands):
 
 
 
 
 
 
 
Basic
142,437

 
141,993

 
444

 
0.3

Diluted
142,696

 
142,311

 
385

 
0.3

DIVIDENDS DECLARED PER COMMON SHARE
$
0.40

 
$
0.38

 
$
0.02

 
5.3

Effective income tax rate
25
%
 
36
%
 
 
 
 
 
 
 
 
 
 
 
 



The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended March 31, 2017 should be read in conjunction with this financial information.
Page 1


Westar Energy, Inc.
Condensed Consolidated Balance Sheets
(Dollars in Thousands, Except Par Values)
(Unaudited)

 
March 31, 2017
 
December 31, 2016
ASSETS
 
 
 
CURRENT ASSETS:
 
 
 
Cash and cash equivalents
$
3,359

 
$
3,066

Accounts receivable, net of allowance for doubtful accounts of $8,420 and $6,667, respectively
237,032

 
288,579

Fuel inventory and supplies
310,861

 
300,125

Taxes receivable
—

 
13,000

Prepaid expenses
20,841

 
16,528

Regulatory assets
121,937

 
117,383

Other
27,070

 
29,701

Total Current Assets
721,100

 
768,382

PROPERTY, PLANT AND EQUIPMENT, NET
9,321,669

 
9,248,359

PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET
255,321

 
257,904

OTHER ASSETS:
 
 
 
Regulatory assets
751,437

 
762,479

Nuclear decommissioning trust
212,820

 
200,122

Other
253,243

 
249,828

Total Other Assets
1,217,500

 
1,212,429

TOTAL ASSETS
$
11,515,590

 
$
11,487,074

LIABILITIES AND EQUITY
 
 
 
CURRENT LIABILITIES:
 
 
 
Current maturities of long-term debt
$
—

 
$
125,000

Current maturities of long-term debt of variable interest entities
28,538

 
26,842

Short-term debt
226,300

 
366,700

Accounts payable
162,231

 
220,522

Accrued dividends
55,771

 
52,885

Accrued taxes
126,497

 
85,729

Accrued interest
85,612

 
72,519

Regulatory liabilities
11,973

 
15,760

Other
69,816

 
81,236

Total Current Liabilities
766,738

 
1,047,193

LONG-TERM LIABILITIES:
 
 
 
Long-term debt, net
3,685,752

 
3,388,670

Long-term debt of variable interest entities, net
82,663

 
111,209

Deferred income taxes
1,767,299

 
1,752,776

Unamortized investment tax credits
209,968

 
210,654

Regulatory liabilities
226,943

 
223,693

Accrued employee benefits
511,368

 
512,412

Asset retirement obligations
349,933

 
323,951

Other
83,757

 
83,326

Total Long-Term Liabilities
6,917,683

 
6,606,691

COMMITMENTS AND CONTINGENCIES (See 10-Q Notes 11 and 12)
 
 
 
EQUITY:
 
 
 
Westar Energy, Inc. Shareholders’ Equity:
 
 
 
Common stock, par value $5 per share; authorized 275,000,000 shares; issued and outstanding 142,047,633 shares and 141,791,153 shares, respective to each date
710,238

 
708,956

Paid-in capital
2,015,287

 
2,018,317

Retained earnings
1,080,268

 
1,078,602

Total Westar Energy, Inc. Shareholders’ Equity
3,805,793

 
3,805,875

Noncontrolling Interests
25,376

 
27,315

Total Equity
3,831,169

 
3,833,190

TOTAL LIABILITIES AND EQUITY
$
11,515,590

 
$
11,487,074


The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended March 31, 2017 should be read in conjunction with this financial information.
Page 2


Westar Energy, Inc.
Condensed Consolidated Statements of Cash Flows
(In Thousands)
(Unaudited)

 
Three Months Ended March 31,
 
2017
 
2016
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
 
 
 
Net income
$
63,482

 
$
68,708

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
88,625

 
83,640

Amortization of nuclear fuel
8,069

 
8,329

Amortization of deferred regulatory gain from sale leaseback
(1,374
)
 
(1,374
)
Amortization of corporate-owned life insurance
5,901

 
5,261

Non-cash compensation
2,468

 
2,491

Net deferred income taxes and credits
19,011

 
33,984

Allowance for equity funds used during construction
(775
)
 
(2,464
)
Changes in working capital items:
 
 
 
Accounts receivable
51,547

 
33,196

Fuel inventory and supplies
(10,581
)
 
109

Prepaid expenses and other current assets
27,399

 
7,712

Accounts payable
(23,135
)
 
(31,158
)
Accrued taxes
47,775

 
49,339

Other current liabilities
(54,223
)
 
(28,984
)
Changes in other assets
2,328

 
21,933

Changes in other liabilities
10,606

 
(11,846
)
Cash Flows from Operating Activities
237,123

 
238,876

CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
 
 
 
Additions to property, plant and equipment
(175,400
)
 
(220,849
)
Purchase of securities - trusts
(4,191
)
 
(13,712
)
Sale of securities - trusts
5,720

 
16,332

Proceeds from investment in corporate-owned life insurance
103

 
23,963

Investment in affiliated company
—

 
(655
)
Other investing activities
(2,354
)
 
(2,840
)
Cash Flows used in Investing Activities
(176,122
)
 
(197,761
)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
 
 
 
Short-term debt, net
(140,407
)
 
66,500

Proceeds from long-term debt
296,475

 
—

Proceeds from long-term debt of variable interest entities
—

 
162,048

Retirements of long-term debt
(125,000
)
 
—

Retirements of long-term debt of variable interest entities
(26,840
)
 
(190,355
)
Repayment of capital leases
(800
)
 
(675
)
Borrowings against cash surrender value of corporate-owned life insurance
910

 
963

Repayment of borrowings against cash surrender value of corporate-owned life insurance
—

 
(22,837
)
Issuance of common stock
470

 
657

Distributions to shareholders of noncontrolling interests
(5,760
)
 
(2,550
)
Cash dividends paid
(52,750
)
 
(49,665
)
Other financing activities
(7,006
)
 
(4,961
)
Cash Flows used in Financing Activities
(60,708
)
 
(40,875
)
NET CHANGE IN CASH AND CASH EQUIVALENTS
293

 
240

CASH AND CASH EQUIVALENTS:
 
 
 
Beginning of period
3,066

 
3,231

End of period
$
3,359

 
$
3,471


The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended March 31, 2017 should be read in conjunction with this financial information.
Page 3


Westar Energy, Inc.
1st Quarter 2017 vs. 2016

Earnings Variances
 
 
 
 
 
 
 
 
 
 
 
 
 
Change
 
 
 
 
 
 
 
($ per share)
 
(Dollars in Thousands)
 
 
 
($ per share)
2016 earnings attributable to common stock
 
 
 
$
65,585

 
 
 
$
0.46

 
 
 
 
 
 
 
 
 
 
 
 
 
Favorable/(Unfavorable)
 
 
 
 
 
 
 
 
 
 
 
Gross Margin
 
 
 
(10,587
)
 
A
 
 
 
Operating and maintenance
 
 
 
(3,441
)
 
B
 
 
 
Depreciation and amortization
 
 
 
(4,985
)
 
C
 
 
 
Selling, general and administrative
 
 
 
(2,701
)
 
D
 
 
 
Taxes other than income tax
 
 
 
6,252

 
E
 
 
 
Other income (expense)
 
 
 
(6,811
)
 
F
 
 
 
Interest expense
 
 
 
(664
)
 
 
 
 
 
Income tax expense
 
 
 
17,711

 
G
 
 
 
Net income attributable to noncontrolling interests
 
 
 
(698
)
 
 
 
 
 
Change in shares outstanding
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2017 earnings attributable to common stock
 
 
 
$
59,661

 
 
 
$
0.42

 
 
 
 
 
 
 
 
 
 
 
Major factors influencing the period to period change in EPS -- Favorable/(Unfavorable)
 
 
A
Due primarily to lower residential and commercial sales from warmer winter weather and one less calendar day due to 2016 being a leap year

 
 
 
 
 
 
 
 
 
 
B
Due primarily to higher distribution expense from taking advantage of warmer winter weather and executing our vegetation management strategy earlier in the year - ($3.9M)

 
 
 
 
 
 
 
 
 
 
C
Due in part to the start of operations of our Western Plains Wind Farm in March 2017

 
 
 
 
 
 
 
 
 
 
D
Due primarily to: higher labor and employee benefit costs -- ($1.8M) and higher merger-related expenses --($0.4M)

 
 
 
 
 
 
 
 
 
 
E
Due primarily to decreased property tax amortization expense that is largely offset by decreased prices -- $6.7M

 
 
 
 
 
 
 
 
 
 
F
Due primarily to: a decrease in COLI benefits -- ($6.5M) and lower equity AFUDC -- ($1.7)

 
 
 
 
 
 
 
 
 
 
G
Due primarily to lower income before income taxes and increases in tax benefits from production tax credits and stock-based compensation


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended March 31, 2017 should be read in conjunction with this financial information.
Page 4


Westar Energy, Inc.
Revenue, Sales and Energy Supply
Supplemental Data
Three Months Ended March 31,
 
2017
 
2016
 
Change
 
% Change
Revenues
(Dollars In Thousands)
 
 
Residential
$
176,169

 
$
179,290

 
$
(3,121
)
 
(1.7
)
Commercial
155,707

 
165,673

 
(9,966
)
 
(6.0
)
Industrial
98,516

 
100,697

 
(2,181
)
 
(2.2
)
Other retail
3,936

 
3,842

 
94

 
2.4

Provision for rate refunds
(16,285
)
 
(18,223
)
 
1,938

 
10.6

Total Retail Revenues
418,043

 
431,279

 
(13,236
)
 
(3.1
)
Tariff-based wholesale
57,221

 
59,020

 
(1,799
)
 
(3.0
)
Market-based wholesale
20,146

 
8,392

 
11,754

 
140.1

Transmission
69,441

 
63,915

 
5,526

 
8.6

Other
7,723

 
6,844

 
879

 
12.8

Total Revenues
$
572,574

 
$
569,450

 
$
3,124

 
0.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Electricity Sales
(Thousands of MWh)
 
 
Residential
1,354

 
1,397

 
(43
)
 
(3.1
)
Commercial
1,617

 
1,659

 
(42
)
 
(2.5
)
Industrial
1,334

 
1,302

 
32

 
2.5

Other retail
20

 
20

 
—

 
—

Total Retail
4,325

 
4,378

 
(53
)
 
(1.2
)
Tariff-based wholesale
1,008

 
995

 
13

 
1.3

Market-based wholesale
1,483

 
880

 
603

 
68.5

Total wholesale
2,491

 
1,875

 
616

 
32.9

Total Electricity Sales
6,816

 
6,253

 
563

 
9.0

 
 
 
 
 
 
 
 
 
(Dollars per MWh)
 
 
Total retail
$
96.66

 
$
98.51

 
$
(1.85
)
 
(1.9
)
Tariff-based wholesale
$
56.77

 
$
59.32

 
$
(2.55
)
 
(4.3
)
Market-based wholesale
$
13.58

 
$
9.54

 
$
4.04

 
42.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fuel and Purchased Power
(Dollars In Thousands)
 
 
Fuel used for generation
$
89,847

 
$
81,639

 
$
8,208

 
10.1

Purchased power
43,452

 
38,830

 
4,622

 
11.9

Subtotal
133,299

 
120,469

 
12,830

 
10.7

RECA recovery and other
(19,444
)
 
(20,411
)
 
967

 
4.7

Total fuel and purchased power expense
$
113,855

 
$
100,058

 
$
13,797

 
13.8

 
 
 
 
 
 
 
 
Electricity Supply
(Thousands of MWh)
 
 
Generated - Gas
323

 
225

 
98

 
43.6

                    Coal
3,458

 
3,288

 
170

 
5.2

                    Nuclear
1,244

 
1,252

 
(8
)
 
(0.6
)
                    Wind
294

 
122

 
172

 
141.0

Subtotal electricity generated
5,319

 
4,887

 
432

 
8.8

Purchased
1,755

 
1,556

 
199

 
12.8

Total Electricity Supply
7,074

 
6,443

 
631

 
9.8

 
 
 
 
 
 
 
 
 
(Dollars per MWh)
 
 
Average cost of fuel used for generation
$
16.89

 
$
16.71

 
$
0.18

 
1.1

Average cost of purchased power
$
24.76

 
$
24.96

 
$
(0.20
)
 
(0.8
)
Average cost of fuel and purchased power
$
18.84

 
$
18.70

 
$
0.14

 
0.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Degree Days
 
 
2016/
 
 
 
 
 
2017
 
20 yr Avg
 
 Change
 
 % Change
Cooling
 
 
 
 
 
 
 
Actual compared to last year
16

 
4

 
12

 
300.0

Actual compared to 20 year average
16

 
2

 
14

 
700.0

Heating
 
 
 
 
 
 
 
Actual compared to last year
1,901

 
2,082

 
(181
)
 
(8.7
)
Actual compared to 20 year average
1,901

 
2,428

 
(527
)
 
(21.7
)

The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended March 31, 2017 should be read in conjunction with this financial information.
Page 5



Westar Energy, Inc.
Capitalization
 
 
March 31, 2017
 
 
 
December 31, 2016
 
 
 
 
(Dollars in Thousands)
 
 
Current maturities of long-term debt
 
$
—

 
 
 
$
125,000

 
 
Current maturities of long-term debt of VIEs
 
28,538

 
 
 
26,842

 
 
Long-term debt, net
 
3,685,752

 
 
 
3,388,670

 
 
Long-term debt of variable interest entities, net
 
82,663

 
 
 
111,209

 
 
Total long-term debt
 
3,796,953

 
49.8
%
 
3,651,721

 
48.8
%
Common equity
 
3,805,793

 
49.9
%
 
3,805,875

 
50.8
%
Noncontrolling interests
 
25,376

 
0.3
%
 
27,315

 
0.4
%
Total capitalization
 
$
7,628,122

 
100.0
%
 
$
7,484,911

 
100.0
%
 
 
 
 
 
 
 
 
 
GAAP Book value per share
 
$
26.79

 
 
 
$
26.84

 


Period end shares outstanding (in thousands)
 
142,048

 
 
 
141,791

 
 
 
 
 
 
 
 
 
 
 
Outstanding Long-Term Debt
 
 
 
 
 
 
 
 
 
 
CUSIP
March 31, 2017
 
 
 
December 31, 2016
 
 
Westar Energy:
 
(Dollars in Thousands)
 
 
First Mortgage Bond series:
 
 
 
 
 
 
 
 
5.15% Series due January 2017
95709TAB6
$
—

 
 
 
$
125,000

 
 
5.10% Series due July 2020
95709TAD2
250,000

 
 
 
250,000

 
 
3.25% Series due December 2025
95709TAL4
250,000

 
 
 
250,000

 
 
2.55% Series due June 2026
95709TAN0

350,000

 
 
 
350,000

 
 
3.10% Series due April 2027
95709TAP5
300,000

 
 
 
—

 
 
4.125% Series due March 2042
95709TAH3
550,000

 
 
 
550,000

 
 
4.10% Series due April 2043
95709TAJ9
430,000

 
 
 
430,000

 
 
4.625% Series due September 2043
95709TAK6
250,000

 
 
 
250,000

 
 
4.25% Series due December 2045
95709TAM2
300,000

 
 
 
300,000

 
 
 
 
2,680,000

 
 
 
2,505,000

 
 
Pollution control bond series:
 
 
 
 
 
 
 
 
Variable series due April 2032 (Wamego)
933623BN9
30,500

 
 
 
30,500

 
 
Variable series due April 2032 (St Marys)
792609AF6
45,000

 
 
 
45,000

 
 
 
 
75,500

 
 
 
75,500

 
 
Total Westar Energy
 
2,755,500

 
 
 
2,580,500

 
 
 
 
 
 
 
 
 
 
 
KGE
 
 
 
 
 
 
 
 
First mortgage bond series:
 
 
 
 
 
 
 
 
6.70%Series due June 2019
485260BL6
300,000

 
 
 
300,000

 
 
6.15% Series due May 2023
485260B@1
50,000

 
 
 
50,000

 
 
6.53% Series due December 2037
485260BJ1
175,000

 
 
 
175,000

 
 
6.64%Series due May 2038
485260B#9
100,000

 
 
 
100,000

 
 
4.30% Series due July 2044
485260BM4
250,000

 
 
 
250,000

 
 
 
 
875,000

 
 
 
875,000

 
 
Pollution control bond series:
 
 
 
 
 
 
 
 
Variable rate series due April 2027 (LaCygne)
502828AJ5
21,940

 
 
 
21,940

 
 
2.50% Series due June 2031
 
50,000

 
 
 
50,000

 
 
Variable rate series due April 2032 (St Marys)
792609AE9
14,500

 
 
 
14,500

 
 
Variable rate series due April 2032 (Wamego)
933623BM1
10,000

 
 
 
10,000

 
 
 
 
96,440

 
 

96,440

 
 
Total KGE
 
971,440

 
 
 
971,440

 
 
 
 
 
 
 
 
 
 
 
Total long-term debt
 
3,726,940

 
 
 
3,551,940

 
 
Unamortized debt discount
 
(11,395
)
 
 
 
(10,358
)
 
 
Unamortized debt issuance expense
 
(29,793
)
 
 
 
(27,912
)
 
 
Long-term debt due within one year
 
—

 
 
 
(125,000
)
 
 
Total long-term debt, net
 
$
3,685,752

 
 
 
$
3,388,670

 
 

The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended March 31, 2017 should be read in conjunction with this financial information.
Page 6



Westar Energy, Inc.
GAAP to Non-GAAP Reconciliation

Fuel and purchased power costs fluctuate with electricity sales and unit costs. As permitted by regulators, prices are adjusted to reflect changes in the costs of fuel and purchased power. Fuel and purchased power costs for wholesale customers are recovered at prevailing market prices or based on a predetermined formula with a price adjustment approved by FERC. As a result, changes in fuel and purchased power costs are offset in revenues with minimal impact on net income. For this reason, Westar management believes that gross margin is useful for understanding and analyzing changes in operating performance from one period to the next. Gross margin is calculated as total revenues, including transmission revenues, less the sum of fuel and purchased power costs and amounts billed by the SPP for network transmission costs (SPP NITS). Accordingly, gross margin reflects transmission revenues and costs on a net basis.

The calculations of gross margin for the three months ended March 31, 2017 and 2016 are shown in the table below. The table also includes a reconciliation of gross margin to income from operations for both periods. Income from operations is the GAAP financial measure most directly comparable to gross margin.
 
Three Months Ended March 31,
 
2017
 
2016
 
Change
 
(Dollars in Thousands)
Revenues
$
572,574

 
$
569,450


$
3,124

Less: Fuel and purchased power expense
113,855

 
100,058

 
13,797

 SPP network transmission costs
60,674

 
60,760

 
(86
)
Gross Margin
$
398,045


$
408,632


$
(10,587
)
 
 
 
 
 
 
Income from operations
$
126,349

 
$
141,811

 
$
(15,462
)
Plus: Operating and maintenance expense
81,198

 
77,757

 
3,441

Depreciation and amortization expense
88,625

 
83,640

 
4,985

Selling, general and administrative expense
59,157

 
56,456

 
2,701

Taxes other than income tax
42,716

 
48,968

 
(6,252
)
Gross Margin
$
398,045

 
$
408,632


$
(10,587
)
 
 
 
 
 
 
 
 
 
 
 
 


The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended March 31, 2017 should be read in conjunction with this financial information.
Page 7